Sufficient audit evidence means that a satisfactory amount (quantity) of audit evidence has been gathered. Appropriate audit evidence means that the evidence is reliable and relevant, i.e. it has the necessary quality which the auditor requires.

The following audit procedures have been carried out by the audit team on the audit of Cloete

(Pty) Ltd, a cell phones manufacturer:

1.Extracted a sample of items from the inventory sheets and performed test counts at the annual inventory count.

2.Reviewed the report of a cell phones expert who was engaged (by the audit firm) to value work-in-progress at year-end.

3.Reviewed the minutes of the monthly directors meetings and recorded all important decisions in the audit work papers.

4.Discussed the allowance for bad debts with the credit controller.

5.Observed the control procedures taking place in the receiving bay whilst goods were being delivered by a supplier.

6.Re-performed the aging of a sample of debtors making up the trade accounts receivable by reference to source documentation e.g. invoices/delivery notes.

YOU ARE REQUIRED TO:

a)Discuss the factors which the auditor should consider when assessing the quality of audit evidence. (12)

b)Discuss briefly the reliability of the evidence gathered from each of the above audit procedures.(12)

c)State to which assertion if any, each of the above procedures is most relevant.